When our managing editor, David McKee, was at the Las Vegas Business Press, he was calling around to local experts, asking their opinions of the best casino amenities in town. Much to his surprise, some of the consumer advocates he spoke with voiced displeasure – vehement displeasure – with Harrah’s Entertainment. Anecdotally, he has found that Harrah’s is the most complained-about company in gaming, by far.
The June 28 Las Vegas Review-Journal told the tale of "recently frequent" Vegas tourist Mitch Goldstone, who paid $548 in advance for Bette Midler tickets – only to receive an 80% discount offer from Caesars Palace on the day of the show ... too late for him to take advantage. "To add insult to injury, his e-mails and calls to Caesars seeking a partial refund or some other compensation have gone unanswered," the R-J added.
Dissatisfaction with Harrah’s has accelerated in the wake of its recent leveraged buyout. Wobbling beneath $24 billion in debt and kneecapped by the recession, Harrah’s has been in a cost-cutting mode. One such move was to start yanking IGT revenue-sharing games off the floor. Harrah’s rationalized its diminution of Wheel of Fortune machines by contending that the games weren’t popular, an assertion that failed the laugh test. (Wheel is famous as one of the most popular progressive machines, year in and year out.) Subsequently, at the 2008 Global Gaming Expo, Harrah’s CEO Gary Loveman tried a different tack, harrumphing that it was a better use of his company’s money to buy back distressed debt than to put it into new slot games.
A recent Las Vegas Sun story reported that dilution of customer service was part of the plan all along: "Their strategy was to boost the companies’ value through job cuts and other cost reductions and take the companies public again after a few years at a large profit." So, while patrons could expect a cut-rate version of the Harrah’s experience (such as the replacement of hot food in premium-player lounges with cold chicken wings), the new owners would theoretically enjoy large profits. But buyers Apollo Management and Texas Pacific Group overestimated the health of the economy and the company’s strength, turning Harrah’s from a golden goose to a giant money-losing albatross.
Joe Fath, a portfolio manager for T. Rowe Price questioned the logic of private-equity buyouts. "Did these companies come in and make Harrah’s and Station [Casinos] better companies? Not really. In the case of Harrah’s," he told the Sun, "they have made things worse."
Perhaps Harrah’s most vocal critic has been Deutsche Bank analyst Andrew Zarnett. While gaming analysts tend to be circumspect, Zarnett has been harping on a refrain that he sounded for the Las Vegas Sun: "And while Harrah’s is working to cut costs to improve its finances, Zarnett is warning that Harrah’s may lose market share as customers defect to MGM Mirage properties and other competitors over customer service issues."
For instance, the Rio’s exterior paint job has been conspicuously peeling for years now, but Harrah’s won’t spring for a new coat to spruce the old gal up. "Phil," a reader of the Two Way Hard Three architecture blog, posted on July 5, "I stopped by a few days ago for the opening of the World Series of Poker as I’ve never taken in what that spectacle is and boy has Rio degraded. All the nice shops they used to have in the newer section were replaced with low level [sic] stores."
Members of the Seven Stars level of Total Rewards players who stay at Harrah’s Grand Biloxi were recently "offered" the chance to vacuum their own rooms with Robot Roomba® self-propelled cleaners. Less need for maids!
"Queen of Comps" Jean Scott, notes that "there have been recent cuts in how much your Reward Credits will ’buy’ ... I wouldn’t say [Harrah’s is] ’sweating points and comps’ -- they have just continuously cut things. Used to be hosts could give you ’off-account’ comps ... Now unless you are a super high roller, you have to use your points first and then maybe you will get extra comps ’off-account.’ And they do continually cut [video poker] paytables. This is a long complicated subject. I could write about it forever."
You can’t bet on Boston Celtics games at Harrah’s properties in Nevada? Because Loveman wanted to own a piece of the team. The NBA’s quid pro quo was the removal of Celtics games from Harrah’s sports books. Amazingly, a compliant Harrah’s board acquiesced.
Sun sports-betting columnist Jeff Haney (an occasional LVA contributor) dropped by the Harrah’s Las Vegas sports book on a fateful April 12, 2008, hoping to bet on three NBA games. After Hane’s money had been pocketed, supervisor Travis Strege seized the betting tickets and left. Two or three minutes later, he returned and told Haney all his bets had been voided. The reason? Strege "didn’t like the lines" on those games. (As Haney later explained to his readers, "casino officials were giving themselves the option of refusing bets on one side of the game while accepting bets on the other side.")
When that explanation didn’t wash with Haney, the Harrah’s official changed his story, saying the bets were nullified because "it’s near the end of the NBA season." Haney concluded, "If you’re a clueless sucker, don’t worry. Your action remains welcome at Harrah’s." His column did not go unnoticed at the Nevada Gaming Control Board, though, which took an interest in the case.
"Sometimes situations take place where perhaps the licensee [casino] doesn’t know the regulations that they think they’re enforcing or not enforcing," agent Paul Tucker told Haney, suggesting that Harrah’s might be about to receive some remedial education.
Random visits to Harrah’s Las Vegas and Caesars Palace ("Beer bottles everywhere," said an eyewitness) found the parking garages at both properties awash in trash, something rarely seen on the Strip. A player at Harrah’s Las Vegas reported the hotel was "disgusting here. It’s stinky and the room is not nice." Was it metaphorical that Harrah’s new general counsel was hired away from the garbage industry? You be the judge.
We haven’t even gotten into how Harrah’s got into trouble with Clark County for remodeling hotel rooms on the sly and out of compliance with fire-safety codes. But that’s a long saga.
While on the subject of complaints, however, we will take this opporutunity to post an email that we received from a reader who, far from complaining, wished to share an experience of excellent customer service that he had received from the Venetian:
"I wanted to post this someplace, but was not sure where - but it is a big enough deal to me that I think something should be said. I booked tickets to see Wayne Brady - but I BOOKED THE WRONG MONTH (I have no idea how I goofed that up).
"To make matters worse, I didn’t realize it until the date had passed. I called up the Venetian show reservation desk, thinking, well, I have nothing to lose. These kind people were able to get my tickets switched to the right date without charging me anything more in the same section I paid for (I expected a penalty fee of some kind - I mean, I DID call after I missed the show). The two women there - Rhonda and May (I called twice) worked with me for 15-20 minutes for each call. My tickets will be waiting there when I arrive. A big thanks to them for saving me what would have been a $200 error."
Now, that’s what we call a happy ending!
